LONDON - The Unite union is taking a stand against Morrisons supermarket, challenging the retailer's plans to alter pension contributions for its workforce. The union, led by General Secretary Sharon Graham, has criticized the company's strategy as an attack on employees' deferred pay, which could increase financial burdens on hourly workers while saving Morrisons up to £10 million annually.
The proposed changes come at a time when food inflation is affecting consumers and businesses alike. Despite this economic pressure and the profitability of Morrisons, including surpluses in all its pension schemes, the supermarket chain intends to implement a two-phase alteration to its pension contributions:
- The first phase, starting on Friday, March 8, 2024, will equalize company and employee contributions at four percent each.
- The second phase, scheduled for Friday, March 7, 2025, will further decrease the company's contributions to three percent while increasing employee contributions to five percent.
These adjustments are expected to affect 40,000 hourly paid workers, including 1,000 warehouse staff in Cheshire and Wakefield. Unite has expressed concerns that this shift may not only reduce take-home pay but also potentially lead some staff to opt out of the pension scheme altogether due to affordability issues, leaving them vulnerable in retirement.
Morrisons anticipates initiating a formal consultation process in early January 2024. However, insiders suggest that the overall auto-enrolment bill for Morrisons might increase regardless of these changes due to proposed pension law amendments. These amendments would require employers to contribute from the first pound workers earn instead of the current £6,240 lower limit.
Looking ahead, Morrisons' final pension proposal stage will align with government auto-enrolment changes outlined in the upcoming Pensions Bill. This bill includes provisions for automatic pension enrolment for individuals aged 18 to 22 by employers and a minimum annual contribution of three percent of an employee's salary up to £50,270 by employers with the removal of the lower earnings limit.
Amidst these tensions, outgoing Morrisons CEO David Potts has spoken before the Trade and Business Select Committee regarding the cost of living crisis impacting millions. In light of these discussions and potential repercussions for workers' pensions, Unite has warned of possible strike action. For further queries on this matter, contact Ciaran Naidoo has been provided by the union.
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